ARLINGTON COUNTY, VIRGINIA

Transcription

1 ARLINGTON COUNTY, VIRGINIA County Board Agenda Item Meeting of March 12, 2005 DATE: March 7, 2005 SUBJECT: Concur with an inducement resolution adopted by the Fairfax County Economic Development Authority (the Fairfax EDA ) and approve the issuance by the Fairfax EDA of the revenue bonds described in such inducement resolution for the benefit of the Public Broadcasting Service ( PBS ). C. M. RECOMMENDATION: Adopt the attached Board Resolution concurring with the attached inducement resolution adopted by the Fairfax EDA and approving the issuance by the Fairfax EDA of the revenue bonds described therein for the benefit of PBS. ISSUES: None. SUMMARY: To request the County Board to concur in action taken by the Fairfax EDA at a meeting held on January 18, The Fairfax EDA approved an inducement resolution (the Fairfax EDA Inducement Resolution ) with respect to up to $24,900,000 of Fairfax EDA revenue bonds (the Fairfax EDA Bonds ) to be issued to assist PBS in financing its build-out and equipping of its newly leased national headquarters in Crystal City and its upgrade of the technical facilities it owns in Fairfax County. Because the Crystal City PBS facilities to be financed with the proceeds of the Fairfax EDA Bonds will be located in Arlington County, applicable provisions of state and federal law require that the County Board concur with the Fairfax EDA Inducement Resolution and approve its issuance of the Fairfax EDA Bonds for the benefit of PBS. BACKGROUND: PBS announced recently the relocation of its national headquarters to a 135,000 square foot leased suite of offices in Crystal City. PBS asked the Fairfax EDA to issue the Fairfax EDA Bonds to assist in the financing of the build-out and equipping of the leased office space and the upgrade of the technical facilities PBS owns in Fairfax County. PBS chose the Fairfax EDA for the revenue bond issue because: (1) the Fairfax County technical facilities are owned in fee simple while the Crystal City facilities are merely leased; (2) the Fairfax County facility improvements will have a significantly longer useful life than the leasehold improvements in Crystal City and therefore the bonds associated with them are more likely to be County Manager: County Attorney: Staff: Barbara Donnellan, Director DMF; Gus Vega, Senior Financial Analyst DMF

2 refunded in the future; and (3) work on the Fairfax County PBS facilities upgrade is likely to commence before work on the Crystal City PBS leasehold improvements. The Fairfax EDA adopted the Fairfax EDA Inducement Resolution on January 18, Because the Crystal City PBS office facilities (2100 Crystal Drive) are located in Arlington County, the County Board is required to concur in the Fairfax EDA Inducement Resolution and approve its issuance of the Fairfax EDA Bonds for the benefit of PBS pursuant to applicable state and federal law. As further required under state law and federal law, the Industrial Development Authority of Arlington County, Virginia ( IDA ) concurred in the Fairfax EDA Inducement Resolution and approved the issuance of the Fairfax EDA Bonds for the benefit of PBS following a public hearing held on February 24, No one appeared in opposition to the Fairfax EDA Bonds at the public hearing. The IDA recommends that the County Board similarly grant its concurrence with the Fairfax EDA Inducement Resolution and its approval of the Fairfax EDA Bonds for the benefit of PBS, as required by applicable state and federal law. FISCAL IMPACT: A Fiscal Impact Statement prepared by PBS and presented to the IDA is attached. There is no cost to Arlington County for this transaction. The project will be in the public interest of Arlington County and will promote the education, safety, health, welfare, convenience and prosperity of its citizens. Concur with an inducement resolution - 2 -

3 RESOLUTION OF THE COUNTY BOARD OF ARLINGTON COUNTY, VIRGINIA WITH RESPECT TO FAIRFAX COUNTY ECONOMIC DEVELOPMENT AUTHORITY REVENUE BOND FINANCING FOR PUBLIC BROADCASTING SERVICE WHEREAS, the Industrial Development Authority of Arlington County, Virginia ( Arlington Authority ) has considered an application of Public Broadcasting Service ( PBS ), an organization which is described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended ( Code ), requesting the Arlington Authority and the County Board of Arlington County, Virginia ( County Board ) approve the issuance by the Fairfax County Economic Development Authority ( Fairfax Authority ) of the Fairfax Authority s revenue bonds in an amount not to exceed $24,900,000 ( Bonds ) to assist PBS in financing or refinancing all or part of the following plan of financing (collectively, "Plan of Financing") for the benefit of PBS: (i) the renovation and equipping of an existing 8,800 square foot technical facility owned by PBS located at 6455 Stephenson Way in the County of Fairfax, Virginia and the construction of an additional 22,000 square foot expansion thereto; (ii) the build-out and equipping of an existing approximately 135,000 square foot office facility leased by PBS located at 2100 Crystal Drive in the County of Arlington, Virginia ( Arlington County ); (iii) the purchase of equipment and furnishings related to and subordinate to the foregoing; and (iv) certain other costs associated with the foregoing Plan of Financing, which may include, but may not be limited to, costs of issuance and credit enhancement costs and other eligible expenditures and the funding of reserves, and has held a public hearing with respect to the Plan of Financing on February 24, 2005; WHEREAS, Section 147(f) of the Code provides that the governmental unit having jurisdiction over the issuer of private activity bonds and over the area in which any facility financed with the proceeds of private activity bonds is located must approve the issuance of the bonds and Section of the Industrial Development and Revenue Bond Act, Chapter 49, Title 15.2, Code of Virginia of 1950, as amended ("Act"), sets forth the procedure for such approval; WHEREAS, Section of the Act provides that if a locality has created an industrial development authority, no industrial development authority created by a second locality may finance a facility located in the first locality unless the governing body of such first locality concurs with the inducement resolution adopted in connection with such financing by the second locality; WHEREAS, a certain of the facilities to be financed with the proceeds of the Bonds are located in Arlington County and the County Board constitutes the highest elected governmental unit of Arlington County; WHEREAS, the Fairfax Authority adopted an inducement resolution (the Inducement Resolution ) with respect to the Bonds on January 18, 2005 and the Arlington Authority has recommended that the County Board concur in the Inducement Resolution and approve the issuance of the Bonds by the Fairfax Authority in order to comply with Section 147(f) of the Code and Section of the Act; Concur with an inducement resolution - 3 -

4 WHEREAS, a copy of the Inducement Resolution, a certificate evidencing conduct of the public hearing and the action taken by the Arlington Authority, and a Fiscal Impact Statement have been filed with the County Board; and WHEREAS, the Arlington Authority has recommended that the County Board concur in the Inducement Resolution and approve the issuance of the Bonds. NOW, THEREFORE, BE IT RESOLVED BY THE COUNTY BOARD OF ARLINGTON COUNTY, VIRGINIA: 1. The County Board concurs in the Inducement Resolution and approves the issuance of the Bonds by the Fairfax Authority as required by Section 147(f) of the Code and Sections and of the Act in order to permit the Arlington Authority to assist PBS in the financing. 2. The County Board s approval of the issuance of the Bonds by the Fairfax Authority does not constitute an endorsement to a prospective purchaser of the Bonds or the creditworthiness of the PBS. The issuance of revenue bonds as requested by PBS will not constitute a debt or pledge of the faith and credit of the Commonwealth of Virginia or Arlington County, and neither the faith and credit nor the taxing power of the Commonwealth of Virginia or any political subdivision thereof will be pledged to the payment of such bonds. Neither Arlington County nor the Arlington Authority shall be obligated to pay the Bonds or the interest thereon or other costs incident thereto. 3. This resolution shall take effect immediately upon its adoption Adopted by the County Board of Arlington County, Virginia this 12th day of March, Antoinette Copeland Clerk, County Board Arlington County, Virginia Concur with an inducement resolution - 4 -

5 FISCAL IMPACT STATEMENT FOR PROPOSED BOND FINANCING Date: February 24, 2005 To the County Board of Arlington County, Virginia Applicant: Public Broadcasting Service Facilities: 6455 Stephenson Way Technical Facility (Fairfax County) 2100 Crystal Drive Office Facility (Arlington County) 1. Maximum amount of financing sought. $24,900,000 $24,900, Estimated taxable value of the facility s real property to be constructed in the locality. 3. Estimated real property tax per year using present tax rates. $9,140,000 $9,533,000 Exempt $91, Estimated personal property tax per year using present tax rates. 5. Estimated merchants capital tax per year using present tax rates. 6. (a) Estimated dollar value per year of goods that will be purchased from Virginia (b) Estimated dollar value per year of goods that will be purchased from non-virginia (c) Estimated dollar value per year of services that will be purchased from Virginia (d) Estimated dollar value per year of services that will be purchased from non-virginia 7. Estimated number of regular employees on year round basis. $65,000 $3,400,000 $4,800,000 $8,600,000 $1,120,000 $11,300,000 $20,930,000 $252,800, Average annual salary per employee. $72,000 $64,000 Concur with an inducement resolution - 5 -

6 RESOLUTION OF THE FAIRFAX COUNTY ECONOMIC DEVELOPMENT AUTHORITY AUTHORIZING THE ISSUANCE OF UP TO $24,900,000 REVENUE BONDS PURSUANT TO THE PLAN OF FINANCING OF PUBLIC BROADCASTING SERVICE WHEREAS, the Fairfax County Economic Development Authority, a political subdivision of the Commonwealth of Virginia ( Authority ), is empowered by the Acts of Assembly, 1964, Ch. 643, pg. 975, as amended ( Act ), to issue its revenue bonds for, among other purposes, the financing of facilities for use by organizations (other than organizations organized and operated exclusively for religious purposes) that are described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended ( Code ), and are exempt from federal income taxation pursuant to Section 501(a) of the Code; WHEREAS, the Authority has received a request from Public Broadcasting Service ( PBS ), an organization which is not organized exclusively for religious purposes and is described in Section 501(c)(3) of the Code, requesting that the Authority issue its revenue bonds to assist PBS in financing or refinancing all or part of the following plan of financing (collectively, "Plan of Financing") for the benefit of PBS: (i) the renovation and equipping of an existing 8,800 square foot technical facility owned by PBS located at 6455 Stephenson Way in the County of Fairfax, Virginia and the construction of an additional 22,000 square foot expansion thereto; (ii) the build-out and equipping of an existing approximately 135,000 square foot office facility leased by PBS located at 2100 Crystal Drive in the County of Arlington, Virginia; (iii) the purchase of equipment and furnishings related to and subordinate to the foregoing; and (iv) certain other costs associated with the foregoing Plan of Financing, which may include, but may not be limited to, costs of issuance and credit enhancement costs and other eligible expenditures and the funding of reserves; WHEREAS, such assistance will benefit the inhabitants of the County of Fairfax, Virginia and the Commonwealth of Virginia by protecting and promoting their health and welfare; WHEREAS, the Plan of Financing has been described to the Authority and a public hearing has been held as required by Section 147(f) of the Code and Section of the Act; and WHEREAS, PBS has represented that the estimated cost of the Plan of Financing and all expenses of issue will require an issue of revenue bonds in the aggregate principal amount not to exceed $24,900,000. NOW, THEREFORE, BE IT RESOLVED BY THE FAIRFAX COUNTY ECONOMIC DEVELOPMENT AUTHORITY: Concur with an inducement resolution - 6 -

7 1. It is hereby found and determined that PBS s Plan of Financing will be in the public interest and will protect and promote the health and welfare of the Commonwealth of Virginia, the County of Fairfax, Virginia and their citizens. 2. The Authority hereby agrees to assist PBS in its Plan of Financing by undertaking the issuance of its revenue bonds in an amount not to exceed $24,900,000 upon terms and conditions mutually agreeable to the Authority and PBS. The bonds will be issued pursuant to documents satisfactory to the Authority. The bonds may be issued in one or more series at one time or from time to time. 3. It having been represented to the Authority that it is necessary to proceed immediately with PBS s Plan of Financing, the Authority agrees that PBS may proceed with its Plan of Financing, enter into contracts for land, construction, materials and equipment for the Plan of Financing, and take such other steps as it may deem appropriate in connection therewith, provided, however, that nothing in this resolution shall be deemed to authorize PBS to obligate the Authority without its consent in each instance to the payment of any moneys or the performance of any acts in connection therewith. The Authority agrees that PBS may be reimbursed from the proceeds of the bonds for all expenditures and costs so incurred by it, provided such expenditures and costs are properly reimbursable under the Act and applicable federal laws. 4. All costs and expenses in connection with the Plan of Financing, including the fees and expenses of bond counsel and Authority counsel, shall be paid by PBS or, to the extent permitted by applicable law, from the proceeds of the bonds. If for any reason such bonds are not issued, it is understood that all such expenses shall be paid by PBS and that the Authority shall have no responsibility therefor. 5. In adopting this resolution the Authority intends to take official action toward the issuance of the bonds and to evidence its official intent to reimburse from the proceeds of the bonds any expenditures paid by PBS pursuant to the Plan of Financing before the issuance of the bonds, all within the meaning of regulations issued by the Internal Revenue Service pursuant to Sections 103 and 141 through 150 and related sections of the Code. 6. The Authority recommends that the Board of Supervisors of the County of Fairfax, Virginia, approve PBS s Plan of Financing and the issuance of the bonds. 7. No bonds may be issued pursuant to this resolution until such time as the issuance of the bonds has been approved by the Board of Supervisors of the County of Fairfax, Virginia, the County Board of Arlington, Virginia and the Industrial Development Authority of Arlington County, Virginia. 8. This resolution shall take effect immediately upon its adoption. Adopted by the Fairfax County Economic Development Authority this 18 th day of January, Concur with an inducement resolution - 7 -